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50<br />
Can You Afford to Retire?<br />
As a result of the pandemic, we<br />
have seen a significant increase<br />
in new clients who have now<br />
decided against ‘putting off’<br />
their retirement any longer and<br />
would like to know if they can<br />
now afford to retire.<br />
Today, most people’s hopes and<br />
expectations for retirement<br />
are very different to those<br />
who were retiring in the past.<br />
Retirees now have much grander plans, such as travelling<br />
the world, spending more time on hobbies or spoiling the<br />
grandchildren.<br />
To enjoy all the things on their wish list, retirees need<br />
to have the income to afford them. For most people,<br />
the state pension isn’t enough to allow them to achieve<br />
their vision of a comfortable and active retirement. And,<br />
increasingly, income from other pensions is not enough<br />
either.<br />
The Retirement Challenge<br />
Pensions have been hitting the headline in recent years,<br />
but the focus has generally been encouraging people<br />
to save and build a fund for retirement. Not enough<br />
attention has been given to an equally pressing issue that<br />
many approaching (or in) retirement face - making their<br />
pension savings last all the way through retirement.<br />
This is more of a concern now than it has ever been in<br />
the past with interest rates being so low and standard<br />
annuities offering poor value. It is highly likely that the<br />
state pension and other individual pension arrangements<br />
that pay a guaranteed income for life are less likely to<br />
account for all of a retiree’s income needs in the future.<br />
In short, there is a good chance that individuals financial<br />
wellbeing in retirement could depend to a large extent<br />
on sources of income which are not guaranteed for life in<br />
the way that traditional pensions are.<br />
What are the key risks to your income in retirement?<br />
Building up a pot of money for retirement and making<br />
sure that money lasts them for the rest of their life are two<br />
very different challenges. The former challenge is easily<br />
Risk One<br />
Risk Two<br />
David Barton<br />
APFS Cert CII (MP)<br />
Chief Executive Officer<br />
defined because you have/had<br />
a definite end date in which to<br />
save for. The latter challenge is<br />
much more difficult because<br />
people don’t know how long<br />
their retirement will last.<br />
There are several specific risks<br />
that need to be considered<br />
when deciding how to generate<br />
an income from retirement<br />
savings, as noted below.<br />
Living longer than expected<br />
Inflation: rising prices will eat into the<br />
value of savings<br />
Risk Three Will the mix of investments be the right<br />
ones?<br />
Risk Four<br />
Risk Five<br />
Withdrawal risk: taking too much, too soon<br />
Long Term Care funding<br />
How can we help?<br />
Planning for retirement when considering all the<br />
above risks can be a daunting task. The future can be<br />
very difficult to predict, and that’s why people use<br />
Independent Financial Advisers. Whilst we do not have<br />
a crystal ball, we do have many years of experience of<br />
helping clients approaching/in retirement achieve their<br />
retirement dreams.<br />
If you are moving into<br />
retirement, please do not<br />
hesitate to give us a call on<br />
01257 423800.<br />
The initial meeting will be at our expense<br />
and is without obligation.<br />
Remember all investments can fall as well as rise in value so investors could get back less than they invest.
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